Self-storage has been a growing industry in the U.S. for a number of decades now, and its growth shows no signs of slowing soon.
However, there is some misleading information out there, so it’s important to be aware of what you’re getting into before you choose to invest.
Read on and we’ll dispel 5 common myths about self storage investment.
1. The Investment Is Easy to Operate
There is a misconception that owning and running a self-storage facility is effortless and runs itself. This simply isn’t true as there are several operational responsibilities, including;
- Keeping aware of competitor rates
- Maintaining the facility itself and the surrounding land
- Adhering to legal requirements
- Keeping financial records
2. The Bigger the Unit the More Profit
It’s easy to assume that a larger unit will naturally bring in more money, but self storage investment is unlike traditional real estate where size is directly correlated to profits.
Operating revenues, cash flow, and other financial aspects are far more important to the overall value of a self storage facility, and these should be considered carefully when looking into potential investments.
Occupancy rates are also important—a facility with a history of poor occupancy is a risky investment unless clear reasons can be established and resolved.
3. Location Doesn’t Matter
Self storage facilities are increasingly popular, and therefore increasingly common to see. This can lead us to believe that you can place a facility anywhere and it will make money.
Sadly, this is yet another misconception. A few things to consider when looking at locations;
- Visibility/Accessibility – A facility that can be seen and accessed easily is far more likely to perform well than one that is secluded or inaccessible.
- Proximity – A self storage facility placed in an area with poor employment and residential statistics will likely underperform. Do some research on the affluence of any locations you consider.
4. Self Storage Investments Are Always Sound
Since the industry has been on an upward trajectory for a long time, one might think that an investment is a “no-brainer”, but the points discussed above should inform us that there is much to consider before jumping into investment.
You’ll need to do sufficient analysis of the long and short-term economy, as well as research into the potential for oversaturation of the market.
It’s not too late to invest, but it may become more difficult to compete as more facilities emerge.
5. Self Storage Is Cheap
In order to have a genuine chance to make good money from an investment, you can’t assume that it’s ok to cut costs when it comes to quality and security.
The expectation is higher for these things, and therefore your investment will need to reflect this.
If you’re considering investing in self storage, why not get in touch with Kingdom Storage Partners, LLC today for advice.
Self Storage Myths Dispelled
Self storage investing is a great business to get into, and with the steps outlined in this article, you can be sure to make your investment with confidence. While the investment may not be as simple as you may have expected, it can certainly be a rewarding one if successful.
For more information and advice on self storage investments and to get started, check out the “how it works” section of the website.